Owner of illegal Midtown hotel coughs up $375,000 in court settlement

The owner of a Midtown apartment building that for years has been dogged with lawsuits has agreed to settle millions of dollars' worth of outstanding violations for $375,000 and bring the property up to snuff, according to federal bankruptcy court documents.

Ben Zion Suky was one of several owners of 440 W. 41st St. and for years rented apartments for less than 30 days in violation of city code, according to City Hall. In 2015 the Mayor's Office of Special Enforcement filed a lawsuit seeking to shut down the illegal inn and collect damages. Before it was resolved, however, Suky sold the 96-unit building to a company controlled by David Goldwasser, who then filed for bankruptcy protection.

The city argued that Goldwasser was responsible for the outstanding violations and penalties, which totaled more than $2 million, according to the documents. Now the two sides have agreed to settle the suit for $375,000 on the condition that Goldwasser bring the property up to code and cease all illegal hotel operations.

"We will use every tool at our disposal to pursue bad actors who take affordable housing off the market," said Christian Klossner, executive director of the Mayor's Office of Special Enforcement, in a statement that also noted that illegal hotels often flout fire codes and can endanger guests.

The settlement eliminates all fines and violations from the building's record provided that the infractions are remedied by the end of April.

The city, however, will continue its lawsuit against Suky and the other prior owners over their past operation of the hotel.

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